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Risk management versus operational action: Basel II in a Swedish context

Wahlström, Gunnar LU (2009) In Management Accounting Research 20(1). p.53-68
Abstract
The New Basel Capital Accord, Basel II, promotes standards for measurement of financial and operational risk in the banking industry. Its approach to Such risk measurement has been severely criticized in the literature, inevitably raising doubts concerning the effectiveness of Basel II. Using data from 25 semi-structured interviews with banking staff in four Swedish banks, the study suggests that Basel II is well established in practice, but there are significant concerns that Such measurement of risk may adversely affect banks' activities. Whilst Basel II is generally supported by banking staff who work directly with risk measurement, its usefulness is questioned by banking staff in operations. This difference between these two groups may... (More)
The New Basel Capital Accord, Basel II, promotes standards for measurement of financial and operational risk in the banking industry. Its approach to Such risk measurement has been severely criticized in the literature, inevitably raising doubts concerning the effectiveness of Basel II. Using data from 25 semi-structured interviews with banking staff in four Swedish banks, the study suggests that Basel II is well established in practice, but there are significant concerns that Such measurement of risk may adversely affect banks' activities. Whilst Basel II is generally supported by banking staff who work directly with risk measurement, its usefulness is questioned by banking staff in operations. This difference between these two groups may be explained in relation to variations in their respective frames of reference. Both groups are inclined to take account of information that meshes well with their existing frames of reference and are thus more inclined to value changes that accord with their own viewpoints. One suggestion for addressing this schism within banks is to encourage a wider debate about the various approaches to implementing Basel II. (C) 2008 Elsevier Ltd. All rights reserved. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Basel II, Bank managers, Regulation
in
Management Accounting Research
volume
20
issue
1
pages
53 - 68
publisher
Elsevier
external identifiers
  • wos:000263654300006
  • scopus:58749103646
ISSN
1044-5005
DOI
10.1016/j.mar.2008.10.002
language
English
LU publication?
yes
id
b45b27b2-6de0-421d-ab54-5e7c52ccd7c8 (old id 1371062)
date added to LUP
2009-05-08 17:42:33
date last changed
2017-10-22 03:50:39
@article{b45b27b2-6de0-421d-ab54-5e7c52ccd7c8,
  abstract     = {The New Basel Capital Accord, Basel II, promotes standards for measurement of financial and operational risk in the banking industry. Its approach to Such risk measurement has been severely criticized in the literature, inevitably raising doubts concerning the effectiveness of Basel II. Using data from 25 semi-structured interviews with banking staff in four Swedish banks, the study suggests that Basel II is well established in practice, but there are significant concerns that Such measurement of risk may adversely affect banks' activities. Whilst Basel II is generally supported by banking staff who work directly with risk measurement, its usefulness is questioned by banking staff in operations. This difference between these two groups may be explained in relation to variations in their respective frames of reference. Both groups are inclined to take account of information that meshes well with their existing frames of reference and are thus more inclined to value changes that accord with their own viewpoints. One suggestion for addressing this schism within banks is to encourage a wider debate about the various approaches to implementing Basel II. (C) 2008 Elsevier Ltd. All rights reserved.},
  author       = {Wahlström, Gunnar},
  issn         = {1044-5005},
  keyword      = {Basel II,Bank managers,Regulation},
  language     = {eng},
  number       = {1},
  pages        = {53--68},
  publisher    = {Elsevier},
  series       = {Management Accounting Research},
  title        = {Risk management versus operational action: Basel II in a Swedish context},
  url          = {http://dx.doi.org/10.1016/j.mar.2008.10.002},
  volume       = {20},
  year         = {2009},
}